High Gas Prices Aren't Going Away — Here's a Look at the Latest Trends in the Global Energy Industry There are several important current trends worth keeping an eye on in 2023 to see how the energy industry, particularly renewables, responds.
- Fuel prices will remain very high — especially in natural gas, coal and oil.
- Offshore wind will continuing to grow in the United States.
Opinions expressed by Entrepreneur contributors are their own.
From the energy proposals in the Inflation Reduction Act to new concerns about fuel dependency following the war in Ukraine, it's been a hectic couple of years for the energy industry, both in the United States and globally. There are several important current trends worth keeping an eye on in 2023 to see how the energy industry, particularly renewables, responds.
Here are several of the most important trends I've noticed for renewable energy companies (and investors). These forces are having the biggest impact right now.
Fuel costs remain high, with mixed results for renewables
I expect fuel costs to remain very high, especially natural gas, coal and oil. Global prices have decreased somewhat in 2023, but reports still indicate that energy prices are hovering at an incredible 75% above the average heading into next year. Reasons for this include the war in Ukraine and sanctions against Russia, new geopolitical alignments that have cut oil production, and general high demand in many sectors.
Some nations are focusing even more on fuel production as a result. United States' natural gas production and exports have increased, for example. But these high prices have also pushed more investment in renewable energy and helped encourage removing some of the older barriers to development. If your renewable energy business is ripe for expansion or new partners, now is an excellent time to develop a proposal and focus on the need for energy independence, regardless of what's happening in the world.
That also means more competition for renewables, but there's plenty of room for growth in many sectors and energy transition plans pick up steam.
Energy storage heats up
The continued growth of renewable energy in 2023 has also led to realizations worldwide that renewable energy storage hasn't quite been keeping up with demand. In the United States, this trend with a renewed focus on batteries, from EVs to helping regulate solar systems across the country. Japan and China are also working on increasing battery availability.
Batteries are only one part of the supply chain issue clean energy is seeing, albeit one of the most notable. But increased production following Covid-19 is helping reduce these tensions and improve production results. Manufacturers should start looking for better supply options if they're struggling – things are improving!
The nuclear pendulum swings back up
Nuclear energy has been an infuriating prospect for energy investors in recent years. It has the potential to fill an ideal niche in the renewables market and circumvents some of the steep problems involved in transitioning to clean energy. But the public generally hates it, and research is conducted at a snail's pace. Also, renewed fears of nuclear attack or contamination in Ukraine have not been inspiring for the sector. But there's also lots of good news.
In 2023, nuclear may finally be ready to assume a key place in clean energy plans worldwide. Germany is rethinking after pulling back from nuclear power in recent years. New plants are being built in Georgia (U.S.), and American research continues to unveil new ways to make nuclear energy more efficient for older reactors and safer for newer models being planned. Turkey, Egypt and China are also investing in new nuclear plants as well. Now's the time for nuclear to show the role it will take.
States war between renewables and the old guard
This trend is most noticeable in solar states like California and Florida. Still, it is happening in many ways across the U.S. Existing power producers, fiercely protective of their rate management and grid operation, are lobbying hard to prevent consumers from benefiting from their solar use. That includes getting rid of credits from selling excess power and limiting future solar installation opportunities. This underlines the need for the renewables industry to spend time on representation and answering proposals like this with quick, decisive alternatives.
Offshore wind is continuing its march in the United States, with wind companies looking to the 19 GW of offshore wind power working through the permitting phase in 2023. This will unleash a wave of new development in the coming years. Wind is just getting ready for a very eventful decade, but long-term planning is required.
How clean hydrogen has new potential
One exciting development I noted from the Inflation Reduction Act changes was a new emphasis on clean hydrogen. Also called green hydrogen, this type of hydrogen is safely produced and disposed of without creating a significant carbon footprint. It's fairly rare in the United States, which uses mostly "gray" hydrogen production. But the IRA includes big tax credits for clean hydrogen, which will likely prompt a mass transition through the United States and open up many new opportunities for carbon reduction programs.